Church Org A has a DB plan, and Church Org B has a DC plan. Church Orgs are related but not in the same controlled group. Both plans are nonelecting church plans. Assume Church Org A's DB plan allows for maximum service credit of 30 years for purposes of benefit accruals. Can Church Org A's DB plan be amended to count service credited under Church Org B's DC plan against the maximum. For example, an individual who has 25 years of service under Church Org B's DC plan leaves the employment of Church Org B and is hired by Church Org A. Under Church Org A's DB plan, the maximum service credit the individual can receive under the DB plan is 5 years (30 years- 25 years). Any issues with this arrangement?

I tried a search sorry if this is out there. I have a real mixed record on this board's searches.

How does one answer Box 13 if a plan has a PS plan and only does PS contributions but will not know if they are going to make a contribution for 2011 until this coming summer?

Are these people active people in a retirement plan?

It is a 12/31/2011 PYE.

Employer A - Plan A - Participant defers 10,000 in 2011 and receives a 10,000 match (1 for 1 match)

Employer B - Plan B - Participant defers 10,000 in 2011 and is to receive a 5,000 match (.5 for 1 match)

Employers are unrelated and the participant is not catch-up eligible.

Both plans are calendar year.

Participant has a 402(g) violation of 3,500. Participant requests the 3,500 be refunded form Plan B.

Questions:

1) Is the related match to the 402(g) refund (NOT 401(a)30) in plan B in the amount of 1750 required to be refunded? If so, can someone provide a site or a passage in EOB?

2) If the match has not yet been funded, does the entire 5,000 need to be funded? Or does only 3250 need to be funded? Must the 1750 be funded and forfeited even if the refund is processed well prior to the funding of the match?

Any replies are greatly appreciated.

Plan's eligibility requirement is 1 Year of Service. Entry dates are 1/1 and 7/1. Plan year is calendar year.

A person is hired from 4/1 thru 10/31 for three consecutive years, working 1000+ hours each time.

He's terminated and rehired each time.

Does this person ever meet eligibility and enter the plan?

I realize the document is the controlling force; it's a Datair VS document. But reading it through, I don't see the definitive answer to my question.

Can an employer make non-elective contributions of 3% to a SIMPLE IRA? Or is it limited to 2%? Could not find anything that shows either way.

Employer wants to provide his one employee with 3% of comp (without any deferral by the employee) while maximizing employer's deferral/contribution to himself. Thought the 3% of non-elective would be a good way, if permissible. Any other ideas if that doesn't work?

I have a question regarding Cycle A restatements, which are due 1/31/12. We have one ESOP which needs to be filed with IRS by this deadline and it doesn't look like we're going to make it because the document is currently being reviewed by the client's attorney. We'll have the 5300 and accompanying forms done and the document is done, just not executed.

Do you think we can make the submission without an executed document? The document would be included in the submission but it wouldn't be executed, we would file it as 'proposed'.

Thanks.

WRERA provides that for a plan maintained by a small employer under Code §408(p)(2)©(i) (not more than 100 employees for the preceding year), the interest rate for § 415(b) may

not be less than the greater of (i) 5.5% or the interest rate specified in the plan.

Does this apply to small employers who contribute towards multiemployer plans, also?

If Form 8955 for 2009 and 2010 is not filed by the deadline of 1-17-2012, it is my opinion that the “per day” penalty runs from the date the annual report (5500) was due, determined without regard to extensions. Thus, if a Form 5558 was filed to extend the return, but the 8955 filing is not completed by the extended deadline, the penalty for BOTH 2009 and 2010 is calculated from the original deadline for the 2010 5500. Is this correct?

Since the IRS "may" waive or reduce the penalty for reasonable cause, how do you apply for such a waiver?

Participant was a 5% owner and there were no other participants in that plan. 5% owner's company is purchased and the (old) plan continues to exist for more than 30 years. 5% owner provides services for the parent company.

Old plan has a TEFRA 242(b) election in place for the 5% owner. Is the election still valid with the "5% owner" as long as he is an employee of the parent company, or should the election have become invalid when he went to work for the parent company.

Thanks.

We have a new plan that allows individuals to defer base pay and bonus. The company has two divisions, employees from both divisions participate. Because payroll is processed differently in the different divisions, under division 1 commission was deferred as bonus. Under division 2, it was not deferred. Division 2 employees have complained that they thought they deferred commissions by deferring base pay.

We want to amend the plan for this year so that division 1 commissions are deferred as bonus and division 2 commissions are deferred as base. We think an amendment is necessary if we're going to treat commissions differently for the divisions.

Here's the question -- can we make that amendment today so that it is retroactive to 1/1/2012?

What is the alternative? To treat commission the same at each division (this would cause us a lot of trouble with division 2 employees)? Can we make an amendment the is prospective only (in which case, what do we do with the commission that wasn't deferred so far)?

The regulations provide the following, which makes me think we can do this retroactive. Section 1.409A-1©(3), the written plan requirement:

"Notwithstanding the foregoing, a plan will be deemed to be established as of the date the participant obtains a legally binding right to a deferral of compensation, provided that the plan is otherwise established under the rules of this paragraph ©(3)(i) by the end of the taxable year of the service provider in which the legally binding right arises, or with respect to an amount not payable in the year immediately following the taxable year of the service provider in which the legally binding right arises (the subsequent year), the 15th day of the third month of the subsequent year. "

My H&W plan terminated their vision benefit during the plan year. On the Form 5500, should I not use code 4E because vision was discontinued or should I still use it for this filing because the vision benefit was offered for part of the plan year? I can't find anything in the instructions that state whether these codes should be used as of the beginning of the plan year or the end of the plan year. Thanks!

ok - employee is let go but given 2 or 3 years of severence pay; therefore still on the books.

Employer stopped 401(k) deductions from severence per the Plan provisions.

Participant is requesting distribution to rollover his account balance.

Since the severence pay is not "earned income" and there are no "hours" associated for plan purposes, can this participant take distribution of his balance?

The plan states that distributions can occur as soon as administratively feasible following termination.

I guess I'm stuck on whether or not he is considered "terminated" for purposes of payout.

Hi all,

I am new to the Welfare Benefit world of 5500 reporting, but do have some expericence with retirement plan 5500 reporting. When I read the instuctions for who must file a 5500 for a Welfare Benefit Plan it looks as if fully insured welfare benefit plans are exempt. I read this that if an Employer offers health insurance thru say BC/BS and all the premiums are paid by Employer and/or Employee that a filing is not required for that plan. I am getting push back because the insurance carrier issues a Schedule A. The argument is that if there is a Schedule A the filing must be required. Can anyone tell me if I'm missing something? I really appreciate any help with this.

What is the penalty for failing to timely notify the PBGC of a pension funding relief election under Code Section 430©(2)(D)?

Thank you.

Client sets aside funds into an escrow account monthly to save up for their profit sharing contribution which they make in March of the following year. They always put the funds back eventually.

That's what I've always heard, but I just found out that this escrow account is in the name of the plan, not the employer!

With that knowledge, it sounds more like the plan sponsor is using plan funds for their own benefit. Don't they have a prohibited transaction every time they take money out of this account (even though the funds have not been allocated to participants, yet)? Does this just need an interest deposit into the plan and payment of excise taxes? Do they need to amend past 5500s to check the box saying "yes" there is a prohibited transaction that has not been corrected?

Thanks!

A company grants a stock option with typical option features (subject to a vesting schedule and then exercisable over a set period of years with shortened exercise period based on the occurrence of certain events (death, disability, etc.)). However, the option is granted over shares of preferred stock that have a dividend preference, such that the preferred stock will not qualify as "service recipient stock" under Section 409A. Therefore, the exemption for "stock rights" is not available. The stock option also does not comply with the requirements of Section 409A because it is not exercisable solely upon a permissible payment event under Section 409A. Therefore, the stock option violates Section 409A.

A formal IRS correction for this type of failure is not available. Any substitution of a replacement stock option that meets the requirements for exemption from Section 409A would violate the substitution rule under Section 409A. Therefore, the stock option is an uncorrectable failure subject to the penalties under Section 409A. Anyone see a better outcome in this situation?

a company has 150 employees.

30 are HCEs

120 are NHCEs

They are creating a new DB plan and would like to cover the 15 owner HCEs and 35 NHCEs for a total of 50 to pass 401a26

They want to essentially include certain employees, such as lower paid and/or younger ones.

Any ideas as to ways in which the plan can be drafted to choose the various employees desired?

There are dozens of job classifications/ job titles.

I suppose we can name the job titles of every group desired to be in the plan and as close as possible arrive at the desired 50 employees.

thanks

I have a situation where I have 5 different locations for an employer, same industry, 1 owner owns a piece of each the others are all different, and I'm not sure if I have an issue with the above. I don't believe it's a controlled group. I was directed to someone but really didn't want to pay the hourly fee for the answer so I'm hoping someone here can help. Also, the entities are all S corps. Entities are counseling centers in different states, so different patients, staff....

Here is the breakdown:

Owner 1 2 3 4 5 6 7 8 9 10

Location 1 45 45 10

Location 2 50 50

Location 3 30 30 30 10

Location 4 33 33 33

Location 5 60 30 10

Owner 1 wants to establish a plan for Location 1 for now. With the other locations adopting the same plan later or their own plan. Thoughts? No owners are related.

I don't think it's a controlled group, or an affilliated service, but muliple employer I was concerned with and if so, what next. I'm in the midst of setting this plan up.

If an automatic enrollment notification was missed by the employee and he/she subsequently had the money returned within the proper timeframe. Is that 1 pay roll for that employee required to receive a minimal match? What am I missing to not have to give a small year end match?

Savings Plan document defines Compensation using safe harbor definition - wages paid by Employer to Employee as reported in Box 1 on Form W-2, plus elective deferrals under Sec. 402g, cafeteria plan contributions under Sec. 125, and transportation fringe benefits under Sec. 132(f), but excluding expense reimbursements, fringe benefits, moving expenses, welfare benefits, etc.

Is a retention bonus which is paid to an Employee while still in the active service of the Employer eligible compensation for 401(k) contribution purposes?